One of Britain’s most notorious cyber criminals hacked into a prison computer system from inside jail – after he was allowed to join an IT class.

Nicholas Webber, 21, jailed for five years in 2011 for masterminding a multi-million-pound internet crime site, triggered the security scare during a lesson.

It is understood his actions caused ‘major panic’ but it is not clear what, if anything, he managed to access.

Internet mastermind: Public schoolboy Nicholas Webber, pictured posing with piles of euros, was sentenced to 5 years in prison for his website GhostMarket that sold stolen credit card details

The prison, HMP Isis in South London, blamed his teacher, Michael Fox, who was employed by Kensington and Chelsea College. He was banned from the prison but the college cleared him of committing any security breaches at a disciplinary hearing last March.

However, he was made redundant when no alternative work could be found for him.

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On Friday, Mr Fox, from Bromley, Kent, began a claim for unfair dismissal, arguing that it wasn’t his decision to put Webber, the son of a former member of Guernsey’s parliament, in his class. He says he had no idea he was a hacker.

At a hearing at Croydon Employment Tribunal, Mr Fox accused the college of not doing enough to find him another job. ‘The perceived problem was there was a tutor who had been excluded by the prison and charged with allowing a hacking expert to hack into the prison’s mainframe,’ he said.

Living a criminal high life: Webber used fraudulent credit cards details to pay for a penthouse at the Hilton Hotel in Park Lane, London

In a statement, the college’s business development director, Shanie Jamieson, said: ‘He [Mr Fox] did not feel he had done anything wrong as the student concerned was in his view a convicted computer hacker and should not have been allowed in his classroom.’

Mr Fox’s tribunal hearing was adjourned until April.

A Prison Service spokesman confirmed Webber was involved in the incident but declined to answer questions about it.

He said: ‘At the time of this incident in 2011 the educational computer system at HMP Isis was a closed network. No access to personal information or wider access to the internet or other prison systems would have been possible.’

The incident happened a year after the opening of the £110 million prison, which houses 18 to 24-year-olds. It has been beset by a series of technological problems caused by breakdowns in its cutting-edge biometric roll-call system where inmates have to leave an electronic thumbprint whenever they move from one part of the jail to another.

Webber was only 17 when he created an internet forum for computer hackers with the potential to fleece up to £15 million from individuals and firms.

He was arrested for using fraudulent credit card details to pay for a penthouse suite at the Hilton Hotel in Park Lane, Central London.

Exclusive boarding school: Nicholas Webber started his hacking activity at Bradfield College in Berkshire, where he deleted friends' detentions from school records

A court was told he set up GhostMarket after leaving £24,000-a-year Bradfield College, Berkshire, where he got into trouble for deleting friends’ detention records from the school computer.

GhostMarket – dubbed a global ‘crimebook’ with 8,000 members worldwide – gave tips on how to create computer viruses, harvest credit card data and use it to pay for goods on eBay, as well as offering to sell details of 100,000 stolen credit cards.

Police have documented £473,000 losses from 3,500 of the cards, but estimate they could have been used to steal £15 million.

Webber, of Southsea, Hampshire, who once boasted online that he was ‘probably the most wanted cyber criminal just now’, also used stolen details to buy computers, video games, iPhones and iPods worth £40,000, and to pay for stays in luxury hotels.